13 Jul 2011
The Power Sector Assets and Liabilities Management (PSALM) Corporation, in line with its continued efforts to bring down the Universal Charge, resumed the power privatization program with the commencement of a new round of bidding for the appointment of an Independent Power Producer Administrator (IPPA) to manage the contracted capacity of the Naga Power Plant Complex.
The Naga Complex consists of the 106.8-megawatt (MW) Naga Coal Thermal Power Plants 1 and 2 and the 39-MW Naga Diesel Power Plant located in Naga, Cebu. The plants are under a Rehabilitate-Operate-Maintain-and-Manage Agreement/Energy Conversion Agreement with KEPCO Salcon Philippines Corporation which is set to expire in March 2012.
According to PSALM President and Chief Executive Officer Mr. Emmanuel R. Ledesma, Jr., PSALM decided to commence the tendering process for the Naga IPPA this month. The first round of bidding for the Naga IPPA was deferred on 18 October 2010 as the new PSALM Board sought to review previous privatization activities. All bidding activities for the Naga IPPA had been completed prior to the deferment, except the actual bidding.
Ledesma stressed that the decision to restart the entire bidding process was intended to maximize proceeds from the sale of the contracted capacity of the complex.
"Recent developments in the Visayas Grid, not the least of which was the start of operations of the Wholesale Electricity Spot Market, necessitated a restart of the Naga IPPA bidding. Additionally, we expect renewed investor interest in the privatization program, resulting in potentially more bidders for the Naga IPPA, thus possibly better privatization proceeds. The proceeds will have a positive effect on the Universal Charge," Ledesma explained.
Ledesma said that PSALM will continuously ensure transparency and accountability in the bidding process. As such, as with previous biddings, private sector and media representatives will be invited to observe the bidding process. Additional measures such as video projectors outside the bidding room will again be implemented for the benefit of observers.
The new round formally began with PSALM's publication of the Invitation to Bid (ITB) in local newspapers last Tuesday, 12 July 2011. The ITB indicates that prospective bidders have until Friday, 22 July 2011, to submit a Letter of Interest as a preliminary requirement. The Bidding Package, which includes the Bidding Procedures, will be issued to interested parties who will execute a Confidentiality Agreement and Undertaking with PSALM, and pay the non-refundable participation fee of USD5,000.00 not later than 5 p.m. of 25 July 2011.
PSALM will hold its Pre-bid Conference for prospective bidders on 12 August 2011 at its main office in Makati City to discuss the Bidding Procedures and other concerns. Deadline for bid submission is set on 10 October.
Strategic Communications and Partnership Division |